FCC Sees Broadband As A Regulated Utility

Should broadband access be treated as a utility? It may provide equality of content on the web, but at what cost. "The Open Internet Coalition, which includes Amazon.com Inc., Google Inc., and EBay Inc. applauded the approach because it will “preserve a level playing field for all participants,” the group wrote in a letter addressed to Genachowski today. Reclassifying Internet services could subject the cable operators to regulations including 'fair and reasonable pricing' and the filing of 'tariffs' ahead of all pricing changes, Moffett (Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York) said in a report. Moffett calls the action 'the nuclear option.'" But is it the answer.

I propose pushing more competition as a goal to assure equal access to content and fair pricing. Encourage and enable other companies to offer broadband access to the home, thus competing with cable and phone's grip. Lower the barriers of entry and turn the industry from oligopoly to a more open marketplace. Through both wire and wireless, broadband access should be easy to get and the choices of provider larger. Then you won't need to call it a utility and require more government regulation. An open economy is a stronger economy.

FCC To Turn Broadband Into a Utility

How much was your water bill last month? Your gas? Your Electric? Your Broadband? That certainly may become the next regulated service. And with it, a move from one month price to per kb consumed. Read your email, that's 2 kb, download a song 10 kb, a movie 10,000 kb. Watch the charges grow. That pipe to your home may have a counter attached and charge per byte.

Quite a slippery slope. That is not what the FCC says will happen though. "But Julius Genachowski, the F.C.C. chairman, said the approach would specifically forbid the commission from regulating rates charged by telephone and cable companies for Internet service and would not allow the commission to regulate Internet content, services, applications or electronic commerce sites." But isn't that what cable companies want to do, charge for usage.

And what about competition. Will other utilities be able to bring broadband to consumers as well. Could I decide whether to get my broadband service from my cable company, electric, gas, or even water company. Will the FCC encourage more competition in this space to maintain consumer friendly pricing. Will further regulation truly help the consumer or hurt us.

CBS News and CNN May Share Resources

The economy is slowly emerging and deals are in the air. Literally. Comcast and NBC, Continental and United. And while this news of CBS and CNN sharing resources is not technically a merger, it makes us wonder if there could soon be one. Cost savings and economies of scale are not new and as revenues have yet to bounce back, cost cutting keeps profits up. It is also the scond pairing of two media giants. First, just months ago was that CBS Sports and Turner were sharing the NCAA Basketball Tournament. Today, that they want to share news personnel and stories. "CBS could presumably realize considerable cost savings if a deal enabled the network to rely on more of CNN’s extensive news-gathering resources." And Turner gets similar savings and more awareness of its brands as well.

So what is stopping CNN and Turner and their corporate parent, Time Warner from buying CBS. Disney has ABC, NBC Universal has NBC, why shouldn't CBS have a corporate parent with multiple cable networks as well as a Hollywood studio. It seems like the right fit of content. And since Time Warner is now separated from its cable distribution company, none of the issues that face the merger of NBC with Comcast. "CBS and Time Warner are partners in several other areas of the television business. They co-own the part-time broadcast network CW (the C is for CBS, the W is for Warner), and the Warner Brothers television studio supplies CBS with a host of its top-rated prime-time shows". A merger would also force the reconciliation of union and non-union news workers that is described in the article. And it establishes control by one owner.

In this age of cost cutting, a combined news team does make sense; a full fledged merger of the two organizations even more so. Would Sumner Redstone agree to sell? Who knows. Would he consider buying...

Consumers Cutting Cable's Cord

Hey cable company, see that tree a mile in front of you, but in your path. If you don't start to act, you will run into it. Hey cable company see that tree, a half a mile in front of you. If you don't react, you'll plow into it. So how come the cable companies are driving smack down into that tree. As their revenues rise, their digital customer base appears to grow, and their average revenue per subscriber increases (ARPU), the cable companies watch as their stock prices rise. It seems all is well.

But trouble is indeed looming on the horizon. "One in eight Americans will cancel or cutback their pay TV service -- either cable or satellite -- in the next year, because it's getting so expensive, according to a major new study." In fact, basic subscriber numbers have consistently been dropping every quarter for cable. Some argue that this group is not spending much to begin with; dropping them makes their ARPU rise. Some are going to the competitors, others are dropping cable altogether.

The rise of mobile devices, iPad announced they sold their millionth unit already, along with wireless, signifies a change in direction for consumers. And while cable companies may need to up the price of broadband to offset the loss of cable, wireless opportunities should bring new competition to the market. I foresee utility companies looking at opportunities to easily expand their reach. Electric and gas companies could tap into this space and provide wireless coverage to entire towns.

As that tree finally gets right in front of cable's path, it may just prove too late. Customers will seek cheaper alternatives from new broadband sources. Today it may be 1 in 8, tomorrow 1 in 3. Cable companies must better adapt to TV Anywhere. It is not authenticating a different signal; it is allowing the home's set top box (or server)act as the gateway to multiple devices, wired and wireless. let the cable box talk to the mobile device, the iPad, the laptop, etc. Use technology like Slingbox and Tivo and others to your advantage. The time to act is now; else, you will be reacting too late to the tree and regardless of what you do, there will be a collision.

TV Ad Sales Market Rebounding

Despite the internet, despite VOD and DVR, despite other media, the TV business is growing again. "Barclays Capital analyst Anthony DiClemente expects upfront ad dollars for the four major broadcast networks -- ABC, CBS, Fox and NBC -- to rise 20 percent to $8.26 billion this year." Good news for the broadcast networks, and certainly good news for the cable nets as well. Advertisers seek TV for their media budget.

At the same time, let's hope that these same advertisers recognize that the only way to break out of the clutter is to diversify so that your message resonates across platforms. Out of box creative, entertaining copy, targeted placement to the key audience groups, can further assure that your message is heard and that consumer purchasing action occurs. And the choices for placement is vast. Besides TV, radio and billboards, newspaper and magazines have not gone away either. A solid direct marketing approach will also enable messages to enter into the home. And then there is social networking. It may appear to be a very inexpensive means to talk to the consumer but viral doesn't necessarily cause results. Social networking opportunities need to co-exist with these other media platforms to truly connect consumers with brands.

And so it is great to hear that spending is rising; let's hope the trend continues across platforms. Healthy spending indicates a better economy. And in this changing entertainment landscape, it's nice to see some good news.

Sirius May Be Safe From NASDAQ Delisting

Now that Sirius' stock price has been up over a buck for over a week, surviving yesterdays market downturn, it seems that Sirius will be safe from delisting. "Wall Street brokerages have price targets on Sirius at around $1.15 to $1.35 a share, not far above the $1.145 that the stock closed at on Tuesday, which was the 10th day that it has ended above $1, satisfying a Nasdaq listing requirement." Let's hope that there is more good news in store for Sirius.

The Problem With Media Convergence

Last night, I sat down to watch Channel 5 in New York, Fox News at 10. One of the stories was about the launch of The Wall Street Journal's new Greater New York section of the paper. The anchors and reporter all held up the edition and effused at how wonderful this edition was and all the news it contained. It mentioned how it competed with The New York Times. Oh, did I mention how wonderful this new section was, per each anchor's comments. This 3 minute plus "news piece" was then followed by the weather.

At no point did the news segment mention one very important fact; that both the Fox Affiliate and The Wall Street Journal are owned by the same organization, News Corporation. Sure there are lots of bloggers and other outlets to provide multiple points of view to a story. But, when two of the largest news organizations merge, they can incorrectly present news as something else. I can not tell you if the Fox news story was actually news or promotional advertising for The Wall Street Journal. It hurts both organizations "credibility" and "truthfulness". Fine to share a "story"; but next time, tell us all the facts; else, we may raise more of a red flag when multiple news outlets in a market converge and merge.

Kindle vs iPad, Which To Buy For E-reading

Thinking of switching from paper to plastic; sorry, I mean from paper to e-reader. Is now the time to make a switch? Which device to choose - Kindle, Nook, iPad, etc. "Amazon is clearly emphasizing Kindle sales and its status as their premier product in response to the potential competitiveness from Apple’s tablet device, the iPad. Amazon subsequently released its own iPad app for the Kindle, to compete with iBooks." So how will it really shake out.

Obviously Kindle has a good year's jump on Apple but the iPad is proving to be a formidable competitor. And I wouldn't look too closely at this first generation product as speculation of iPad's future models make it even more of a must have product. And how many devices must we carry remotely to be connected: a phone, a reader, a laptop. As our phones provide web connections, with video, do we need a reader to do the same. Or should it remain true to its core use, bringing the written page to a device in an easy to read manner, emulating a book design, but lighter and easier to hold and carry. Can the iPad compete in this scenario or are its uses best needed elsewhere. Could the Kindle and iPad prove more complementary than competitive.

Ultimately the consumer will decide how they best want to use each of these devices and how each fits into their daily lives. As for me, I continue to wait. Still too early to buy, but certainly engaged in their progress and which would better work for me.

Can A Free Website Make Money With A Pay Platform

Hulu, that online alternative to cable TV, is moving away from a free website model. Not satisfied with an ad supported revenue model, Hulu seeks a second source of income with a pay model approach. "Under the proposal, Hulu would continue to provide for free the five most recent episodes of shows like Fox's "Glee," "ABC's "Lost" or NBC's "Saturday Night Live." But viewers who want to see additional episodes would pay $9.95 a month to access a more comprehensive selection, called Hulu Plus, these people said." But will consumers pay?

And no doubt that these pay programs will also include commercials so essentially you are paying for cable on the web. So the choice, pay your cable bill or your Hulu bill. But wait, isn't the reason consumers cut their cord to cable is because they were tired of paying for TV. What was once free should be free again. So to ask these users to start paying again may present them with a bit of a dilemma. How the consumer responds and how much revenue Hulu receives from this new model will ultimately decide whether it expands or dies on the vine.

Can consumers accept an online subscription service for TV programming? Will they start paying for something they have been getting free for a couple of years? Or will they move away from Hulu and seek their content from other sources? Clearly this move by Hulu is a stepping stone. Most current content is still available for free. This subscription model is clearly aimed at the heavy user. But losing your best customer could be a concern to Hulu. A drop in use will affect ad revenue and could prove disastrous. Once you lose a customer, it is hard to win them back. So be careful of this slippery slope you are taking; it could be profitable, but it could also end your business.